Search
  • Emily A. Georgiades, Esq.

U.S. SEC Will Amend Crowdfunding Rules to Allow for Higher Capital Raises

In the midst of COVID-19 and the economic repercussions we are experiencing globally, it is easy to see the negative. Perhaps SME’s are the hardest hit in this recession we are about to experience full force. But let us not forget that from the depression we experienced in 2009 legislation was born on April 5, 2012, called the “JOBS Act” that helped start-ups grow. The U.S. implemented crowdfunding rules which not only helped businesses obtain venture capital but also made investing more obtainable for the average person.


In the midst of COVID-19 and the economic repercussions we are experiencing globally, it is easy to see the negative. Perhaps SME’s are the hardest hit in this recession we are about to experience full force. But let us not forget that from the depression we experienced in 2009 legislation was born on April 5, 2012, called the “JOBS Act” that helped start-ups grow. The U.S. implemented crowdfunding rules which not only helped businesses obtain venture capital but also made investing more obtainable for the average person.


It is befitting that on the anniversary of the JOBS Act and in the wake of what is happening with the downturn of the economy, Reg A+ and Regulation Crowdfunding is being amended to allow for greater capital raises.


The exempt offering rules are used to access critical capital needed to create jobs and scale their businesses. Here are some of the new funding caps available for SME’s looking to raise capital:


New Regulation CF


Reg CF is going to be amended to allow for a funding cap from $1.07 million to $5 million in a 12-month period. This is actually being competitive with EU crowdfunding regulations which are for the most part set at $5 million.


For Reg CF, the Commission aims to amend the investment limits for investors in these offerings by not applying any investment limits to accredited investors.


Perhaps more exciting is the fact that Reg CF will allow for “testing the waters” which is currently utilized under Reg A+.


Another new feature being introduced is that Special Purpose Vehicles (SPV’s) will also be able to utilize Reg CF.


New Reg A+


Reg A+ (Tier II) will raise its funding cap from $20 million to $75 million in a 12-month period.


New Reg D


Rule 504 of Reg D also received attention as it was bumped up to $10 million.


If you are interested in conducting a crowdfunding or private placement campaign, contact us at emily@eaglaw.co


#crowdfunding #RegA+ #securitieslaw #SEC #Rule504 #RegD #SPV #fundingcap #funding #capitalraise #sme #business #corporation #securitiesregulations #eaglaw




© 2023 by E.A. Georgiades & Co  LLC. Attorney advertising. Previous outcomes do not guarantee same results.

  • LinkedIn Social Icon
  • Twitter Social Icon